Blog

Jun 04

Generate Leads and Close Sales

When a business owner first sets out in a new market, it can be hard to determine how to establish a customer base, especially with a tight marketing budget. However, one of the most cost-effective and ingenious ways to tap into a new client base is through host-beneficiary relationships.

Host-beneficiary relationships are loose partnerships between complementary, noncompeting businesses. They use trust, relationships, and credibility to generate leads and close sales through a special offer presented by the beneficiary as a gift from the host. These relationships cost much less than advertising, which means they reduce the amount you spend acquiring a new customer.

This marketing strategy is a great way to enter a new market or take advantage of an opportunity that requires a specific and personal approach. For example, a new hairdresser might want to create a partnership with an established local aesthetician to help him build a core clientele. The aesthetician sends coupons to her own clients, offering free highlights as a gift for their patronage. The hairdresser honors those coupons. Since most people would purchase a cut in addition to highlights, the hairdresser would be able to build his own clientele while making a profit in the process.

If you are starting out, it may seem like you have nothing to offer the host; however, in the eyes of her customers, the host is providing a reward or exclusive offer for the customers’ continued support and loyalty. While the newcomer gains a client list, the host gains goodwill.

To enter a host-beneficiary relationship, you must have a clearly defined market or market segment. Not knowing or understanding your target market will render your relationship ineffective and a waste of money and time. After you’ve defined your audience, make a list of potential host businesses you can approach. These businesses must have your same target market, an established customer contact list, and a credible reputation.

Approach your potential hosts with thought and strategy. Introduce your product or service the way you would present it to new customers: heavy on the benefits and light on the features. Establish your own credibility by providing materials, testimonials, research, and the exclusive offer. Above all else, let the host know how this potential relationship can benefit them as much as it benefits you. Though simple, host-beneficiary relationships are an invaluable tool for businesses looking to tap into new markets.